August 03, 2012

The Ninth Circuit in the Bluetooth decision (654 F.3d 935) reversed a prior attorney’s fees award to plaintiffs’ attorneys in a class action case, finding the district court failed to double check the lodestar amount against the percentage of recovery method. Bluetooth has been cited many times, and apparently played a big role in a substantial fee reduction in a class action involving Toyota Prius headlights.

As reported by Amanda Bronstad in an August 1, 2012 post in The National Law Journal, five plaintiffs’ firms have appealed a district judge’s rejection of $4.7 million in requested attorney’s fees as “highly unreasonable.” U.S. District Judge Manuel Real calculated fees at about $760,000 under the percentage of recovery method (or 20% of the total value of the settlement), awarding 65% of this total amount to one firm and the other 35% to be distributed to the remaining other firms. The problem was that all five firms had about $3.1 million in billings alone based on base hours. The main firm argued that the lodestar should have been used primarily because the California Consumers Legal Remedies Act was at issue, besides taking issue with the district court’s valuation of the case. The Ninth Circuit just got the first round of briefing, so we may be reporting on this in the future.